Mortgage Declined By HSBC? Here’s What To Do Next.

As one of the largest high-street mortgage lenders in the UK, HSBC can afford to have quite strict lending criteria. So, if you’ve recently been declined for a mortgage with HSBC, don’t feel too disheartened, as it doesn’t mean all other mortgage lenders will make the same decision. 

Due to the sheer volume of mortgage enquiries HSBC receives, each application will be vetted using an automated decision-making process. If your application doesn’t fit within HSBC’s lending criteria, you’ll likely receive a frustrating ‘computer says no’ response. 

The good news is your mortgage journey is not necessarily over because of one rejection. We work with lots of specialist mortgage lenders who assess each applicant on a case-by-case basis using human underwriters. This method allows far greater flexibility for accepting applications that might not seem ‘perfect’ when viewed by a computer. 

In this guide, we’ll outline some of the main reasons why HSBC would decline a mortgage application, what steps you can take to improve your chances when you re-apply and how Haysto can help make your mortgage possible when other brokers can’t. 

Why HSBC might decline your mortgage application

In general, HSBC could decline your application because of two key factors: 

• You haven’t provided enough evidence for HSBC’s affordability assessment to prove your income can cover the monthly mortgage repayments for the amount you want to borrow (this can be a particular issue if you’ve been self-employed for less than two years).  

• Your credit score is too low, typically caused by one or more bad credit issues registered on your Credit Report and/or you’re not registered on the electoral roll at your current address. 

More specifically, your mortgage application could be declined by HSBC for several reasons, including: 

• Your annual income is below £100,000 and you want to borrow more than 4.75 times your salary for the mortgage you need

• You’re a professional gambler

• You’re currently paying into a debt management plan (DMP)

• A default was registered on your credit record within the last three years

• A County Court Judgment (CCJ) was registered on your credit record within the last three years

• You’re using any of the following benefit allowances as your main source of income: 

  • Adoption allowance

  • Carers allowance

  • Employment and Support allowance

  • Guardian allowance

• Previous missed payments and/or arrears have been registered on your credit record

• Your annual income is made primarily from seasonal contracts

• You’ve applied for a mortgage on a joint borrower sole proprietor basis

• You’ve applied for a mortgage under the Right to Buy scheme

In addition to the above, HSBC will decline mortgage applications for particular property types, such as converted churches, mobile homes, houseboats, commercial B&Bs, and non-habitable properties (without a working kitchen or bathroom). 

(Source: Criteria Brain )

What steps you should take next

If HSBC has rejected you for your mortgage, the one thing you mustn't do is rush in and reapply straight away with other mortgage lenders, expecting a different outcome that may or may not come. 

Applying for a mortgage will show on your Credit Report but won’t show if you were accepted or declined. However, multiple hard search mortgage applications in a short period of time will indicate to a lender that you’ve been rejected. 

This is why it’s essential to take your time and follow these steps to give yourself a better chance of getting the mortgage you need: 

• Find out why HSBC declined your mortgage. Speak to HSBC and establish why your mortgage was declined and what the circumstances were that led to this decision. If the reason given is specific to HSBC’s lending criteria (you work mainly on seasonal contracts or you’re a professional gambler, for example), you can then search for lenders who will accept these conditions. If it’s a credit issue, take some time to repair your credit score before reapplying. 

• Speak to a mortgage broker. Once you know the issue that led to your application being rejected by HSBC, the smart next move is to seek the help of an experienced mortgage broker. Your broker will be able to help rebuild your application and identify lenders who will look more favourably on your case. 

• Apply with the right lender. Taking the time to fix whatever issue led to your application being rejected now puts you in a much stronger position to get the mortgage you need. With your broker’s assistance, you can now reapply with a lender whose criteria are better suited to considering your case. 

How Haysto can help make your mortgage possible

Haysto has a proven track record of securing mortgages for people rejected by mainstream lenders, such as HSBC. That’s because we know that automated decision-making simply doesn’t work for most complex issues, and everyone’s circumstances are different. 

A rejection from one lender doesn’t mean all others will do the same. In many cases, the difference between getting a mortgage or not can depend on choosing the right lender most suited to your specific requirements. 

We work closely with several specialist lenders who help people in similar situations every day. These lenders prefer a more human approach to assessing an application rather than a computer-based checklist, giving you a better chance of success. 

All you have to do is make an enquiry and a member of our mortgage team will be in touch to get started.